More on the World of Banks

Your Financial Go-To Girl is back, with more just for you. GirlMogul Lily here, waiting to tell you about this awesome system we have for money. Everyone deals with money, so having some way to keep it and use it safely is necessary. That’s the basic use for banks. But, as I read, there is so much more for us to discover! Let’s get to it.
There different types of banks. One type of bank is a commercial bank, which are the ones we use every day. Those are banks that you see commercials for, ads for, and even just on the streets. They are the most well known and practical for people like you and me. They deal with credit and debit cards, savings and checking accounts, loans of all kinds, certificate of deposit’s, mortgages, and money market accounts. This sounded to me like just a bunch of words, so I decided to dig a little deeper to define some of these terms. We already talked about cards and account, but what are a mortgage and a money market account? A mortgage is a type of loan from the bank which is used to purchase your house. It has a special name because it deals with home ownership. So, if you have a mortgage on your house, and cannot pay it back, the collateral is your actual house. A money market account is actually just like regular savings account. The difference is that instead of having just one interest rate, your interest rate changes every week! This does not mean it’s unsafe, it just means you have an opportunity to make more or less interest on your money depending on the market.
So, in addition to commercial banks, there are internet banks! These can be a good option as everything is done online and electronically. There are no big buildings or lines you have to deal with, and the bank is always accessible right where you are. But, since these are relatively new, you have to every careful with them. You have to make sure that the bank is regulated and that there is insurance on your money so you don’t lose it or get scammed.
The last kind of bank I want to talk to you about is called a credit union. Ever hear of a commercial for one of these? I know I have! They were originally opened as non-profit organizations instead of commercial banks. Having an account with a credit union is almost the same as a commercial banks in terms of what they provide you. But, the difference is that now, credit unions are owned by the people who have an account at the credit union. Each person who opens an account owns a part of the company, and also helps to elect a Board of Directors. These people then decide on the credit union’s terms and interest rates.
Whew! That was lot. Till next time, GirlMoguls!
Posted by GirlMogul Lily

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